Fear index signals stock market warning

  • VOLX
    (${instrument.percentChange}%)


Source: www.tradingview.com

The fear index (weekly chart) suggests the market is too complacent. It has flashed a potential pullback.

The CBOE Volatility Index, or VIX, measures the market's expectation of volatility over the next 30 days. It reflects investor sentiment. The VIX is derived from option prices for the S&P 500 index.

The VIX is between its lower blue and red bands, i.e., the market expects little volatility. As a contrarian indicator, this is the complacency region - the market may be tending too much towards the greed side.

Trade the News: View our Economic Calendar

Its RSI (middle chart) has moved above its signal line, suggesting that this complacency may be about to be punished. We are monitoring the SPX500 (bottom chart). It's in its bullish channel between the upper blue and red bands. However, the RSI trigger may push it down into its neutral area between the blue bands as the sentiment rebalances.

Image by Christian Dorn from Pixabay

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.